JobXDubai

The Bahrain real estate market has experienced a 3% decline in transactions in Q1 2024 compared to the same period last year, according to a recent report by Savills. While the residential sector witnessed a slight decline, the retail, industrial, and office sectors maintained stability, with minor rental drops in the office sector.

The total number of sales transactions reached 6,124 in the first quarter, with the value of real estate trading decreasing by 1.2% to BHD1.1 billion in 2023 compared to the previous year. However, the volume of real estate transactions jumped 24.1% last year over 2022.

The report highlighted that homebuyers are becoming more strategic in the market, primarily focusing on mid-range properties with improved amenities, shifting the market dynamics in favor of tenants. A stream of projects is expected to be handed over in 2024, which could further widen the gap between demand and supply and potentially affect capital values in the short term.

In the residential sector, overall rental values recorded marginal dips compared to Q4 2022, with rents across apartments declining by 1.3% and villas by 1%. Low-end property rents, however, dropped by 5.6% YoY.

The office sector experienced a quiet period during Q1 2024, with businesses renewing leases in high-quality Grade A properties. Rental rates for high-end offices contracted by 1.8% during the period. Capital values for Grade A properties remain stable due to an increase in supply, with completions like Sayacorp, Future Generation Reserve Tower, and Seef Boulevard expected in the near term.

Retail rental rates have maintained stability in Q1 this year for the fourth quarter in a row, due to the festive seasons. In the industrial rental market, the manufacturing sector remained the primary driver of demand, with an average space occupancy ranging from 1,500 to 3,000 sqm. Despite a 1.2% YoY increase in rentals, average rental rates for large and medium-sized warehouses remained steady.

The Bahrain real estate market continues to grow, driven by government support, rising investor confidence, and increasing demand for real estate in the region. As the market dynamics continue to shift, it will be crucial for investors and developers to stay informed and adapt to the changing trends and demands in the market.